The postings of a customs lawyer in Chicago on the state of customs law and international trade law. Important Disclaimer: None of this is legal advice, don't act on it. Don't ascribe these statements to my law firm, its partners or clients. Don't steal from my blog. I wrote it, I own it. But, feel free to link to me. Also, under the rules regulating speech by attorneys, this blog may be construed as lawyer advertising. I am the sole party responsible for the content.

Tuesday, October 30, 2012

Ancient Coins, Modern Courts

Despite what casual readers of this blog might think, customs law is not all about classification, value, and NAFTA. It actually covers a wide range of issues, many of which involve regulations that Customs and Border Protection enforces for other agencies. By way of example, you may already know that I have a strange fascination with the illegal (and reprehensible) trade in endangered species. Another interest of mine is the legal and illegal trade in cultural property.

A recent decision of the United States Court of Appeals for the Fourth Circuit discusses the regulation of trade in cultural property with respect to ancient coins.

By way of background, the Convention on Cultural Property Implementation Act ("CPIA") permits foreign governments, known as State Parties, to request that the United States prohibit the unauthorized importation of culturally significant items. The intent here is to staunch the traffic in illegally looted artifacts. To be eligible for protection, the object must be "archaeological or ethnological material of the State Party." That means that the object must have been first discovered within, and is subject to export control by, the State Party that requested protection for the object. Importation of protected objects is permitted if it is licensed by the home country, if it was exported from the State Party at least 10 years prior to importation to the U.S. and the importer owned it for less than one year, or the article was exported from the home State Party before the international convention took effect.

Ancient Coin Collectors Guild v. U.S. Customs and Border Protection involves the attempted importation of ancient coins from Cyprus and China. Both countries had requested protection for their cultural property. In publishing notice of the restrictions, the United States included coins among the types of objects subject to protection (even though coins were not specifically included in the requests). The coins being imported were of unknown provenance and the location of their initial discovery was also unknown. The likely, but unproven, reason for this is that the coins have been circulating among collectors for years (and probably as currency for many years before that). Customs asked for documentation proving the admissibility of the coins. The Guild produced none and Customs seized them.

On appeal to the Fourth Circuit, the Guild argued that the restrictions are ultra vires, which means that the government exceeded its authority by imposing these restrictions. The Court, however, noted that the CPIA involves a sensitive area of foreign relations in which Congress has delegated authority to the President, who exercises that authority through the State Department. Thus, the Court declined the invitation to take a searching review of the policy decisions behind the imposition of these restrictions. According to the Court, that is not a task for the judiciary.

On another point, the Guild argued that coins were not subject to seizure until the government shows that they were first discovered within and subject to export controls by the home State Party. The Court rejected this argument first on the grounds that it is logical to assume that the coins were actually discovered in Cyprus or China. More directly, it is the importer's obligation to show that the goods are admissible. Customs does not need to prove inadmissibility.

The Guild made a technical argument under the Administrative Procedure Act claiming that the decision to protect these coins was arbitrary and capricious. Moreover, the Guild argued that it was based on prejudgment and ex parte (meaning one-sided) contact. The Court reject this line of argument first because the exercise of foreign affairs by the President is not subject to APA review. But, even if it were, the Court found that the action was not arbitrary and capricious.

Which means, of course, that the Court affirmed the district court and Customs and Border Protection. However, the Guild may get a second chance at this. The Court's decision only finds as a matter of law that the seizure was proper. Should it choose to do so, the Guild may now go through the administrative and judicial process of challenging the forfeiture of the coins based on the facts it can muster. But, that is a fight for another day.

Yes, if the coins end up both seized and forfeited (meaning they become the property of the United States), they will likely be sent back to Cyprus and China.

The law involved here is specific to cultural properties. While it may possibly overlap with some more modern artwork, a different law is usually applied there. With respect to modern art, for example art looted by the Nazi regime, the merchandise is considered to have been stolen. Once the goods are stolen, a subsequent good faith purchaser cannot get title to the goods. Under the National Stolen Property Act, it is illegal to import stolen property. That is the basis for the seizure of stolen art (or other objects).